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The government said Tuesday that foreign demand for U.S. Treasury securities fell by the largest amount on record in December with China reducing its holdings by $34.2 billion.
What will this mean for United States fiscal/economic health?
Last edited by cleanhouse; 02-16-2010 at 09:29 AM..
The reliance on foreign debt reached, did not start, but reached an all time high under Bush, now we are hooked. Once China's banking system matures in 20 or so years, they won't have any need for us. We will have to pay higher interest rates, along the lines of other countries whose debt borders on junk or emerging market debt. Of course for investors, this has its advantages and will present opportunities for both profit and being ripped off.
Not an expert here, but if China, for instance, is reducing it's US debt position someone has to be increasing their position.... Yes? No?
Yes you are right and it is the Federal reserve.Uncle Ben takes Tbonds and prints up some money and then turns around and buys the Tbonds that no one wants and adds them to the FR balance sheet.Wonder how long this little game can go on since the FR and the SSI trust fund are holding on to about $4 trillion?A couple of that trillion will have to be redeemed or sold so SSI can pay the baby boomers,Hmmmm wonder who is going to buy those?
Don't worry be happy the Keynesian's have it all figured out,the main prophet Barnanke did not even see the housing bubble collapsing so we should listen to him.LMAO. You can read more about from this old thread that died a sudden death,go here:
The government said Tuesday that foreign demand for U.S. Treasury securities fell by the largest amount on record in December with China reducing its holdings by $34.2 billion.
What will this mean for United States fiscal/economic health?
It doesn't mean much. FOX and Limbaugh etc like to say we borrow everything from China. I don't know why they say that, but either they have no clue, or they say it because it sounds scary and scary "news" is good "news".
The truth is that vast majority of the 'borrowed' money is simply owed back to US citizens and it would make absolutely no sense to pay it all back. Should we pay off the foreign debt? Yes, sure, but that is only a small percentage of our debt.
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